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Stocks Mixed Amid Tech Troubles The bears dominated Wall Street on Wednesday, but a late-session rally helped stocks edge toward a mixed finish as a downbeat outlook from Cisco Systems Inc. weighed on technology shares. A sales warning from National Semiconductor Corp., which was downgraded by brokerage firm Smith Barney, added to the pressure on the technology sector. The sell-off erased much of the gains from the previous session, and led the market lower for most of the day. Volatility in oil prices also contributed to investor worries. Crude futures posted modest declines after Saudi Arabia signaled it could raise its production output if necessary, but resumed their climb later in the session. Oil was up 30 cents at $44.82. "We keep coming back to the same concern: crude oil prices," said Ken Tower, chief market strategist for Schwab's CyberTrader. "Until there is some sign that crude oil is starting to come down ... and stabilize, I think everybody is going to remain very uncertain about how much of a slow down in growth we will have." In the final hour of trading, the Dow Jones industrial average was up 8.03, or 0.1 percent, at 9,952.70, making a strong recovery after spending most of the day in negative range. The broader gauges also rebounded, but remained in minus territory. The tech-dominated Nasdaq composite index fell 26.03, or 1.4 percent, to 1,782.67. The Standard & Poor's 500 index shed 3.40, or 0.3 percent, to 1,075.64. Tuesday's much-anticipated rate hike, which brings the federal funds rate to 1.5 percent, did little to impress investors, who were more focused on the Federal Reserve's upbeat assessment of the economy. The Fed's Open Market Committee blamed much of the recent slowdown on high energy prices, and said the economy was poised to improve. The suggestion that more rate hikes were ahead gave investors some pause, but most analysts agree that the market's underlying fundamentals remain strong. Still, a long list of unknowns continue to worry investors. "We feel good about the broader economy, on the back of the Fed release ... and are confident going forward. And corporate earnings are all solid," said David Hegarty, head trader at Commerzbank Securities. "But there are a number of things that are just keeping the pressure on us: energy, terrorism, increasing interest rates and a tight presidential race." Cisco's after-the-bell report Tuesday did little to quell fears about the second half of the year. The networking company beat earnings expectations, but its cautious outlook on corporate technology spending rattled investors, and several brokerage firms downgraded the stock. Cisco shed 10 percent, or $2.14, to $18.32. National Semiconductor sank 14 percent, or $2.14, to $13.56, after it said revenues for the current period were likely to miss forecasts due to a drop-off in orders. Its remarks raised alarm among analysts about prospects for the chip sector. The Walt Disney Co. was down 61 cents at $21.83, despite reporting earnings that beat expectations, with a jump in profits on higher theme park attendance and growth in its cable networks. Former board member Roy Disney, who resigned last year in a bid to oust chief executive Michael Eisner, questioned the prospect for future growth, however. Also among decliners, Toys "R" Us Inc., was down 31 cents at $16.11 after releasing details of a planned restructuring, which is likely to include the spinoff of its baby product division. Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange. Volume came to 1.08 billion shares, compared to 910.25 million traded at the same point Tuesday. The Russell 2000 index, which tracks smaller company stocks, was down 3.21, or 0.6 percent, at 526.62. Overseas, Japan's Nikkei stock average finished 0.9 percent higher Wednesday. In Europe, France's CAC-40 and Britain's FTSE 100 each closed down 0.9 percent, while Germany's DAX index lost 1.1 percent.
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